* Nasdaq gains, S&P 500 ~flat, Dow dips ahead of FOMC results
* Utilities leas S&P sector gainers; energy weakest group
* Euro STOXX 600 index up ~0.2%
* Dollar, crude, gold ~flat; bitcoin dips ~2%
* U.S. 10-Year Treasury yield ~1.49%
(.)
June 16 - Welcome to the home for real-time coverage of markets brought to you by Reuters reporters. You can share your thoughts with us at markets.research@thomsonreuters.com
MEME STOCKS LOSING STEAM, QUAD WITCHING COULD MAKE IT WORSE (0930 EDT/1330 GMT)
A basket tracking some of the most popular meme stocks is down by 17% over the past week, analysts at Vanda Research said.
Indeed, such stocks as AMC Entertainment Holdings Inc
, GameStop Corp , Clover Health Investments Corp
and Workhorse Group are all under pressure in the early throes of Wednesday's regular session after a wild ride over the past few weeks.
The current meme stock bubble has been running for three weeks now, just about the same time as the last bubble in January. With retail flows surpassing the peak of Q1 and given the amount of risk embedded in these investments, retail investors will rush to the exit unless there's an immediate rally, Vanda Researchers said.
This week's quadruple witching event could make things even more complicated for meme stocks. In the last couple of days open interest on call options on meme stocks has been declining as traders take profits before the expiry. In response, market makers are unwinding their long-stock hedges, creating a negative feedback loop, analysts added.
Quadruple witching refers to the simultaneous expiration of single-stock options, index options, single-stock futures and index futures, which happens on the third Friday in March, June, September and December.
"All manias run out of energy at some point and this is no different," said Art Hogan, chief market strategist at National Securities in New York.
"It hasn't completely disappeared but overall volumes are starting to peter out and that's just the natural course of events."
(Medha Singh)
*****
NASDAQ VS COMMODITIES: TIME FOR TECH TO STEP UP? (0900 EDT/1300 GMT)
The tech-laden Nasdaq Composite relative to the Refinitiv/CoreCommodity CRB index appears to once again be at an important juncture on the charts.
The Nasdaq/CRB ratio, on a weekly basis, hit a record high of 80.54 in early November of last year. Since then, however, the Nasdaq has underperformed "stuff." In fact, the ratio hit a 14-month low in early June:
Now nearly 67, the ratio is flirting with what appears to be significant support in the form of a log-scale trend line from its 2011 trough, now around 65.65, as well as the 100-week moving average $(WMA.AU)$, now around 64.40.
The ratio did suffer a one-week closing violation of the support line in late 2018. However, with the market's December bottom that year, it quickly reversed to the upside without breaking the 100-WMA. The trendline then contained weakness in 2019, and early 2020.
Of note, the ratio has been on a record run vs its 100-WMA. In fact, it is on pace for its 499th straight weekly close above this long-term moving average. This current run above the 100-WMA dwarfs the ratio's 155-week streak that lasted into the Y2K tech bubble top.
Thus, in the face of this week's event risks in the form of today's FOMC results , and Friday's quadruple witching , it may now be time for tech to once again step up, in order to underpin a renewed Nasdaq advance relative to commodities.
A ratio weekly close below support can add credence to the view that a sea change in trend is underway. A deeper decline to threaten the March 2000 high, at 28.9, could see the ratio lose more than half its value from current levels.
(Terence Gabriel)
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(Terence Gabriel is a Reuters market analyst. The views expressed are his own)
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